Why Real Estate-Backed Tokens Offer the Best Safe Haven for Crypto Traders

caleddare
August 15, 2022
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By
logos

Landshare Team

It’s no secret that the cryptocurrency market is highly volatile. While its potential upside is unmatched, it also frequently experiences sharp price corrections and enters prolonged bear markets. When this happens, investors need a place to protect their funds from losses — often referred to as safe havens.

A safe haven is a type of investment that is expected to retain or increase in value during times of market turbulence. Investors move funds into safe havens to mitigate their risk of losses during market downturns. In the crypto space, these types of investments can be difficult to find — especially if the investor is also expecting a consistent return.

Real estate-backed tokens offer the ability to invest in real estate directly on-chain. They are not affected by cryptocurrency bear markets because their value is derived from real world assets. By moving trading profits and idle funds into real estate-backed tokens, investors can protect their funds from volatility while also earning regular cash flows.

What are real estate-backed tokens?

Real estate-backed tokens, or Asset Tokens, are cryptocurrencies that represent the ownership of real-world assets. To put it simply, the value of an Asset Token is based directly on the value of the asset it represents. All of this is made possible by a process called Tokenization.

Tokenization Model

Tokenization splits the ownership of a real estate asset into smaller parts represented by tokens. Each individual holder of the tokens is a co-owner of the asset and receives a share of the profits it generates. Asset Tokens tokens can be bought, sold, or traded just like any other token on the blockchain.

For a more detailed description of Asset Tokens and the process of Tokenization, check out Landshare’s Tokenized Asset Overview video.

Real Estate Tokens vs. Stablecoins

Traditionally, crypto traders move their funds to stablecoins such as USDT, BUSD, and USDC to take profits or protect themselves from market downturns. Because the value of a stablecoin is always at or near $1 USD, they allow traders to keep their funds on-chain while protecting themselves from volatility and price fluctuations. While stablecoins offer great utility in this regard, real estate-backed tokens offer several unique advantages as a safe haven for crypto traders.

1:1 Backing

Tether’s USDT is the most popular stablecoin in the market today. There is a widespread assumption that Tether holds enough USD to back up the whopping 69,000,000,000+ circulating supply of USDT. However, at this point it is not clear how many USDT tokens are backed by actual USD. According to a recent Bloomberg article:

“Exactly how Tether is backed, or if it’s truly backed at all, has always been a mystery. For years a persistent group of critics has argued that, despite the company’s assurances, Tether Holdings doesn’t have enough assets to maintain the 1-to-1 exchange rate, meaning its coin is essentially a fraud.”

On October 15, 2021, the CFTC ordered Tether to pay a $41 million dollar fine for issuing unbacked USDT tokens. According to the release:

“The Tether order finds that since its launch in 2014, Tether has represented that the tether token is a stablecoin with its value pegged to fiat currency and 100% backed by corresponding fiat assets, including U.S. dollars and euros. However, the Tether order finds that from at least June 1, 2016 to February 25, 2019, Tether misrepresented to customers and the market that Tether maintained sufficient U.S. dollar reserves to back every USDT in circulation with the “equivalent amount of corresponding fiat currency” held by Tether and “safely deposited” in Tether’s bank accounts. In fact Tether reserves were not “fully-backed” the majority of the time.”

The concerns over Tether’s operations should be taken seriously if cryptocurrency is to be adopted by the mainstream public. Without being collateralized 1:1 USD, a “run-on-the-bank” situation, or even regulatory actions, could leave hundreds of millions of users with valueless USDT that can no longer be redeemed for $1 USD.

By contrast, Asset Tokens are fixed supply tokens transparently backed by real world assets. Because token holders are shareholders of the asset itself, they have a direct legal claim to their share of the asset’s value.

Cash returns and appreciation

While stablecoins offer protections against market downturns, they do not intrinsically offer any yields or returns to investors, nor can they appreciate in value. In fact, due to inflation rates reaching 30-year highs, holding stablecoins can mean a loss of buying power over time.

Asset Tokens offer similar protections from the volatility of cryptocurrency while also offering annual cash yields and value appreciation averaging between 6–8% and 5–10% respectively, for total annual returns up to 18%. While the value of the US dollar shrinks, US home prices are projected to increase by 13.6% over the next year.

Security

Traders may choose to stake stablecoins on loan or yield farming platforms such as Venus or Beefy Finance. These platforms offer a great way to earn some extra income while holding USD and greatly outperform the rates offered by banks.

Unfortunately, these platforms come with their own risks that can still result in traders losing their investment. Due to the open nature of DeFi, many protocols have vulnerabilities that can be exploited by hackers, and these attacks are not uncommon. $119 million was recently stolen from BadgerDAO by hackers, Cream Finance was exploited for over $100 million, and Poly Network was exploited for $600 million. According to Cipher Trace, over $10 Billion was stolen in DeFi related theft this year.

In addition to DeFi risks, investors are vulnerable to the loss or theft of wallet private keys and exchange hacks, meaning funds can be lost even by holding. If these events occur, there is typically no way to retrieve lost funds.

Tokenized Real Estate offers additional security measures that traditional protocols cannot. While traditional tokens can be lost due to DeFi exploits or wallet hacks, Asset Tokens are immune to this because they are owned by the investor, not a wallet. If an investor’s wallet suffers an attack or is compromised, the stolen tokens can be administratively reissued to a secured wallet.

Conclusion

Tokenized Assets offer a great way to hold your profits in a secure and traditionally stable manner without the risks of being run on, being hacked, or sitting on depreciating assets. While your first thought for a safe haven may be holding stablecoins, it may be time to consider real estate-backed tokens as an alternative.

Landshare offers fractional real estate investment on the blockchain, enabling hassle-free investment for as little as $50. You can find out more about the Landshare platform at https://landshare.io and view our current offering at https://app.landshare.io/property-details.

New to Landshare? Learn more about the platform at docs.landshare.io.

Find us on:

Twitter | Medium | Youtube | Telegram

caleddare
July 4, 2025
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July 4, 2025

How Did RWA Tokenisation Become a $23 Billion Power Sector in the First Half of 2025?

RWA tokenization industry has grown by a whopping 260%, rocketing from $8.6 billion in January to $23 billion in June. But what is behind this meteoric rise?
By
logos

Landshare Team

2025 has been a strange year thus far. We are just halfway through it and have already seen global conflicts, wars, controversies, and a lot of uncertainty. However, despite all of this, the RWA tokenization industry has managed to surprise everyone with its exceptional growth and adoption rate.

According to a Binance Research report, the RWA tokenization industry has grown by a whopping 260%, rocketing from $8.6 billion in January to $23 billion in June. But what is behind this meteoric rise? Hype? Social media trend? No, it's purely value creation and innovation that completely changes how investing works. 

The report also mentions that the regulatory frameworks in the US crypto market have become clearer and investor-friendly, which has been a key reason for this exceptional growth.  

So, let's understand the fundamentals of RWA tokenization projects and find out how you can invest in a Real World Asset token to maximize your gains in 2025 and beyond. 

What Are RWAs and Why Are They Important?

Real‑World Assets (RWAs) are tangible, income‑generating assets, just like real estate, commodities, or private credit that have been tokenized on a blockchain. Simply by converting a portion of an asset’s ownership rights into digital tokens, RWAs utilize the solidity of physical investments with the speed, transparency, and accessibility of crypto markets.

Think of a $2 million house in a posh area of New York. With a cost that massive in this economy, the buyer pool has become significantly smaller. Only high-net-worth individuals or wealthy families can show interest and have the buying capacity to own that house.   

Now, here’s where RWA tokenization comes into the picture. Instead of selling your house to an individual, you can tokenize real estate and break down the ownership rights fractionally. This will open doors even for a college student to invest in real estate by buying a token worth $50.

So, a low entry point makes sure your house sells faster and at its fair value. At the same time, from an investor’s point of view, there is no need to lock in massive capital and buy an entire property to enjoy real estate gains it’s a win for everyone.  

Key Features of RWA Tokens

1. Tangible Asset: Each RWA token is directly tied to a real‑world asset, whether it’s a square foot of office space or a small percentage of ownership in a corporate bond. This way, investors enjoy true ownership rights and capital gains.

2. Fractional Ownership: Instead of needing hundreds of thousands of dollars, investors can buy into multimillion‑dollar properties with as little as $50 per token.

3. 24/7 Liquidity: This is the biggest advantage of investing in real-world asset tokens. These tokens trade around the clock on blockchain marketplaces, turning traditionally illiquid assets into instantly tradable units.

Why RWAs Are Taking Off?

So, what is it about RWA tokenization that has led to a 260% growth just in six months, even in these highly uncertain market conditions? Well, there are more reasons than one: 

1. Massive Market Potential: The global value of real estate, commodities, and private credit is insanely huge, yet only a tiny portion of it is on‑chain currently. That means almost 99% of the opportunity remains untapped and ready to be tokenized.

2. Institutional Endorsement: The majority of prominent asset managers believe they plan to allocate to tokenized assets within two years, because of the promise of lower costs and faster settlements.

3. Regulatory Clarity: Governments and regulators in the U.S., EU, and Asia have issued guidance on security tokens. This shows the acceptance of asset tokenization globally and also lowers compliance risk for investors.

4. Low Entry Points: Minimum investments start at $50 - $100 per token. These amounts are negligible compared to the massive capital required to own traditional real estate properties or invest in private credit. 

5. Transparent Records: Blockchains provide an immutable audit trail. So, the title, rent distributions, and token balances are publicly verifiable.

6. Yield and Diversification: Real-world asset tokens often deliver returns that are much above many traditional fixed‑income instruments. For instance, Landshare, a popular real estate token platform, has consistently provided 8-12% annualized returns. 

Furthermore, investor portfolios benefit from diversification by adding real assets alongside stocks, bonds, and crypto. So, tokenization lets you invest in more using less capital. 

In essence, RWA tokenization is not just a technical novelty. It’s a system that shows how modern investing will work. It unlocks trillions in locked‑up value, democratizes access to high‑quality assets, and lets investors worldwide tokenize tangible assets like never before.

How You Can Invest in This RWA Revolution Using Landshare 

Among other RWAs, real estate has a special place just because of the stability it provides and the trust investors have in it. There are several real estate token platforms in the market, but Landshare stands out by making property investing truly fractional and accessible.

Why Landshare Tokens Can be a Great Investment?

A recent Deloitte Center for Financial Services report suggests that over $4 trillion of real estate will be tokenized by 2035. So, this is just the start. 

Early fractional real estate crypto tokens are perfectly set for outsized gains. As the market gets bigger, liquidity will increase, and tokens that are backed by quality assets, generate real yield, and comply with regulations, are more likely to outperform purely speculative altcoins.

Landshare fulfills all these conditions and will, therefore, enjoy growth, thanks to the global acceptance of RWA tokenization and the excitement around it. 

Conclusion

The 260% surge to $23 billion in the first half of 2025 has cemented RWA tokenization’s status as one of the biggest innovations in the world of digital finance. By effectively mingling blockchain’s tech and liquidity with real estate’s stability, this market is rewriting the rules of property investing. 

So, tokenize real estate now, join RWA tokenization projects, and buy the Landshare token to claim your share of this massively expanding market. As the industry grows, the first movers will enjoy the greatest rewards. So, start early and invest not just for gains but also for being a part of a technological and financial revolution. 

caleddare
June 27, 2025
eye
June 27, 2025

Landshare Development Update–June 23rd, 2025

Brief update of Landshare development
By
logos

Landshare Team

The past few months have been an exciting and productive time for the Landshare ecosystem. From launching on a new blockchain network to expanding marketplace access, advancing our onboarding campaign, and continuing development on new features — we’ve been busy laying the foundation for the next phase of growth.

In this update, we’ll cover all the latest developments, including the Plume mainnet launch, our integration with Polytrade, ongoing progress with LSRWA Express and Lending Pools V2, and more. Let’s dive into what we’ve been building behind the scenes and what’s coming next!

Plume Network Mainnet

Earlier this June, we launched the LSRWA token on the Plume Network Mainnet — a major milestone for the Landshare ecosystem and a big step forward in our mission to bring real estate on-chain. We’re proud to be one of over 200 projects building on Plume and helping shape the future of RWA tokenization.

After 4+ years exclusively on BNB Chain, we’ve officially expanded, and investing in Landshare’s real estate pool is now more accessible than ever for Plume’s 3M+ community.

To celebrate, we kicked off the “Arriving at Plume” Zealy Event, where users competed for a 1,000 pUSD rewards pool and became the first to invest in LSRWA via Plume. The campaign brought in hundreds of new verified users, and we’re thrilled to continue growing our community on the first full-stack RWA Chain!

Partnership with Polytrade

Integrating with Plume Network has opened the door to 200+ ecosystem partners — and the first major step is already live: Landshare’s real estate properties are now listed on Polytrade, one of the top RWA marketplaces with access to 5,000+ real-world assets across 10+ chains.

With Landshare on Polytrade, anyone can invest in income-generating U.S. real estate and earn passive returns from both rental income and property appreciation — all in just a few clicks.

🔗 Start exploring: https://lnk.polytrade.finance/landshare

And that’s just the beginning — with more powerful integrations on the way to bring even more utility to the Landshare community. Stay tuned!

Onboarding Campaign

We’ve previously hinted at a major, ongoing onboarding campaign, and now it’s time to share more! This initiative is designed to level up our referral program and hit some big-picture goals:

  • Educate: Help users explore the Landshare ecosystem step-by-step
  • Activate: Drive engagement with core features like staking, LPs, and NFTs
  • Boost on-chain activity: Incentivize real usage, not just clicks
  • Retain: Reward users who stick around and stay active over time

To support this, we’re building a dedicated Onboarding Portal where users can track their progress, discover new tasks, and explore the ecosystem at their own pace. We’ll also add helpful hints and walkthroughs across key pages to guide new users naturally and drive interaction with our features.

While we don’t have a public launch date just yet, most of the campaign logic, the portal framework, and technical setup are already complete. We can’t wait to roll it out and bring more people into the Landshare journey!

LSRWA Express

LSRWA Express is a simplified, fully passive investment feature currently in development on the Landshare platform. It allows users to deposit USDC and earn real-world, asset-backed yield without the need to directly interact with LSRWA tokens, navigate secondary markets, or engage in DeFi mechanisms such as staking or liquidity farming.

We’ve previously published a detailed explanation of this feature, including how the epoch-based system works and the broader vision behind LSRWA Express. If you haven’t yet, you can explore the full documentation here: https://docs.landshare.io/platform-features/lsrwa-express

While there are no major updates to announce at this time, we want to assure the community that development is actively ongoing. Our technical team is focused on finalizing the backend infrastructure and preparing for internal testing. We’ll keep the community posted as we move closer to launch.

LSRWA Liquidity Updates

A core priority for the Landshare ecosystem is ensuring that LSRWA tokens can be traded at or near their true Net Asset Value (NAV). One of the most direct and effective ways to support this is by improving price stability on the DS Swap secondary market.

To address this, we’re introducing a strategic buyback mechanism: When DS Swap prices dip significantly below NAV, a portion of the rental income will be allocated toward buying back LSRWA tokens and removing them from circulation. This approach helps in two ways — it supports the market price while also acting as an anti-dilution mechanism, effectively increasing value for existing holders.

This system is designed to benefit the entire community, enhancing both liquidity and price integrity. We’ll continue to closely monitor LSRWA trading conditions and explore further improvements to ensure a healthy, accessible, and sustainable market for all participants.

Lending Pools V2 Coming Soon

We’ve seen a lot of anticipation around the launch of our updated lending pools, and we’re just as excited as you are. We know the wait has been long, building something secure, efficient, and impactful takes time. The new Pools V2, offering interest rates of up to 8%, will go live as soon as the Defactor team completes the migration to their updated protocol.

In the meantime, if you’re curious about what’s ahead, check out our latest article that dives deep into the power of combining tokenized real estate with cross-chain lending. Learn how this integration unlocks new capital, improves user flexibility, and enables yield opportunities across ecosystems:

💡 Real estate–backed liquidity
🔁 Borrow on one chain, collateral on another
🔗 Seamless multichain access to RWAs

Read more: Expanding Investment Horizons in the Multichain Era

EthCC Event in France

Connecting in person is a big part of building real relationships and growing any project — that’s why our CMO, Ivan Voznoi, is heading to EthCC in Cannes next week!

It’s shaping up to be a busy and exciting week, with Ivan planning to attend top-tier side events like the RWA Summit by Centrifuge, RWA Cannes by NFT Paris, Builders Night by MetaMask, and plenty more.

Wishing him a productive week full of new connections and opportunities. Time to bring tokenization to the Côte d’Azur! 🇫🇷💼🏝️

User Onboarding & Education

As Landshare continues to grow, one of our top priorities is ensuring that new users can navigate the ecosystem with clarity and confidence. While the Landshare platform offers a robust suite of features — from tokenized real estate and staking to liquidity pools and lending — we understand that the value we provide must be accessible and understandable from the very first interaction.

That’s why we’re focused on streamlining the onboarding experience across multiple fronts — including the upcoming LSRWA Express feature, a dedicated onboarding campaign, educational blog content, clearer communication strategies, and participation in Twitter Spaces to connect with the wider community.

We firmly believe that a smooth, intuitive onboarding experience is essential for long-term growth. Without it, even the most innovative products can remain underutilized or misunderstood. By lowering the entry barrier and offering ongoing education, we empower users to fully engage with the Landshare ecosystem — not just once, but for the long term.

Wrap Up

As we look ahead to the second half of 2025, our focus remains on delivering real value to our users and continuing to push the boundaries of what’s possible in RWA tokenization. Whether it’s simplifying onboarding, expanding to new ecosystems, or enhancing our DeFi tools — every update brings us closer to our long-term vision of making real estate investment accessible, transparent, and rewarding for everyone.

Thanks as always to our community for your continued support and feedback — we’re building this together. Stay tuned for more updates soon, and make sure to follow us on X (Twitter) and Telegram to be the first to know about what’s next!

caleddare
June 6, 2025
eye
June 6, 2025

90% of Commercial Real Estate Remains Illiquid; How Does Tokenization Change That?

Despite the massive value locked in commercial real estate, most of it is difficult to buy, sell, or trade quickly, making it highly illiquid.
By
logos

Landshare Team

Commercial real estate (CRE) is one of the world’s largest asset classes, with a value of over $120 trillion in 2025. However, almost 90% of this number remains illiquid. This means only a small fraction can be bought or sold quickly at fair value. 

This lack of liquidity has long frustrated investors, developers, and institutions, tying up capital in office towers, retail centers, and industrial parks for months or even years. This major problem haunting the real estate industry is now being strategically solved using tokenization. 

Tokenization has changed how CRE works by turning traditionally illiquid properties into tradable digital tokens. This simply means that you can fractionally invest in commercial properties by purchasing tokens that can be sold and bought just like shares. This leads to high liquidity and access for potential investors.  

So, let us analyze why CRE is so illiquid, how tokenization works, its benefits, and the best and safest tokenization platforms that you can check out. 

Why is 90% of Commercial Real Estate Illiquid?

Commercial real estate is usually considered to be very reliable and provides healthy returns despite larger market volatility. So, why is liquidity a big problem in this industry?  

So, traditionally, when you think of liquidity, you usually picture stocks or bonds you can buy or sell almost instantly. However, CRE transactions require complex legal documentation, approvals, huge funds, and often lengthy negotiations. A typical “quick” commercial deal can still take months to close.

Key Reasons Behind CRE Illiquidity:

High Capital Requirements: Purchasing even a small retail plaza or office building often requires millions of dollars of equity, plus layers of debt. Moreover, it is a known fact that interest rates for commercial mortgages are higher than residential ones. This also adds to the cost of investment. 

Complex Due Diligence: Investors must verify zoning, environmental reports, tenant leases, and conduct structural inspections. These are processes that routinely take weeks or months.

Limited Buyer Pool: The kind of capital required to invest in commercial real estate is enormous. Only certain investors have the expertise and resources to buy and manage CRE, further narrowing the market.

Regulatory Constraints: CRE sales are often governed by local, state, and federal regulations, adding layers of compliance and approval.

Because of these hindrances, owners often discount sale prices, and that too to attract a limited pool of buyers. Effectively, sellers bear extended holding periods, sometimes passing incur losses or minimal profits even when market conditions are favorable.

How Real Estate Tokenization Solves This Problem?

Firstly, let us understand what tokenization is:

Tokenization is the process of converting ownership rights or cash flows of a real-world asset into digital tokens on a blockchain. Each token represents a fraction of the asset’s value. For example, instead of buying a $5 million office building, you might purchase 1,000 blockchain tokens at $5,000 each. 

Here, each token entitles you to a proportional share of rental income, appreciation, and governance rights. This means that when you plan to sell, you do not need to look for a buyer who can purchase the entire property. You may sell any number of tokens you wish.  

Benefits of Commercial Real Estate Tokenization

Here are some distinct advantages that real estate tokenization offers exclusively:  

Fractional Ownership: Splitting a single property into many tokens lowers the entry barrier. Instead of millions, investments begin from amounts as low as $50.

Quick Process: Token trades occur on a blockchain marketplace. Once regulatory and KYC steps are in place, the ownership transfer happens almost instantaneously. So, no more waiting for months of manual paperwork and approvals.

Larger Buyer Pool: Tokenization ensures that global investors can participate in 24/7 trade. With fewer geographic or institutional constraints, tokenization dramatically increases the number of potential buyers.

Transparency and Security: Ownership records are immutably stored on a public or permissioned ledger, reducing the risk of disputes and simplifying due diligence.

Democratizes CRE Investments: Historically, CRE investing has been restricted to large institutions, family offices, and high-net-worth individuals. Tokenization lowers the minimum investment to as low as $50, inviting a much larger audience. Effectively, retail investors can now partially own office buildings, retail centers, or industrial warehouses.

Improved Liquidity and Property Prices: Tokenized CRE assets can trade on digital exchanges, often with real-time order books, allowing investors to buy or sell instantly, not months. This liquidity, in turn, adds to the asset's value and leads to better prices, reducing the risks involved in private CRE markets.

In short, tokenization makes CRE more organized and accessible, much like stocks or bonds, where trading can occur daily and investments can be made worldwide.

How Landshare Solves Illiquidity in Real Estate?

Landshare is one of the fastest-growing tokenization platforms, specializing in U.S. properties. Their platform allows investors to purchase fractional tokens (as little as $50 per token) representing property ownership.

Key Landshare features:

Fractional Tokens: Each token gets you a proportional share of a property or a portfolio of properties.

Automated Rent Distribution: Smart contracts automatically allocate rental income to token holders each month.

Liquidity: Landshare tokens trade 24/7 on blockchain-based decentralized exchanges and select centralized venues, providing continuous liquidity.

Secure and Transparent: Every property undergoes professional due diligence, inspection, and legal compliance before Landshare adds it to its property portfolio.

4 Properties Sold: Landshare has sold four US properties on the BSC chain. This shows that it is a platform that believes in action and growth, and not hype like some crypto tokens. 

Benefits for Investors

Low Entry Point: For just $50, even beginners can try their hand at real estate Investing.

Predictable Cash Flow: Monthly rental yields (8-12% range annually) are streamed directly to wallets.

Transparent Ownership: All token balances, transaction history, and asset performance data are available on-chain, ensuring transparency and trust.

Conclusion

So, as 90% of the commercial real estate remains illiquid, there is a massive market for tokenization to capture. It offers a more transparent, accessible, and affordable solution to a problem that has existed for a long time.

Lastly, for people who have always wanted to invest in commercial real estate but did not have the capital, tokenization opens that door for you!    

Why Real Estate-Backed Tokens Offer the Best Safe Haven for Crypto Traders

It’s no secret that the cryptocurrency market is highly volatile. While its potential upside is unmatched, it also frequently experiences sharp price corrections and enters prolonged bear markets. When this happens, investors need a place to protect their funds from losses — often referred to as safe havens.

A safe haven is a type of investment that is expected to retain or increase in value during times of market turbulence. Investors move funds into safe havens to mitigate their risk of losses during market downturns. In the crypto space, these types of investments can be difficult to find — especially if the investor is also expecting a consistent return.

Real estate-backed tokens offer the ability to invest in real estate directly on-chain. They are not affected by cryptocurrency bear markets because their value is derived from real world assets. By moving trading profits and idle funds into real estate-backed tokens, investors can protect their funds from volatility while also earning regular cash flows.

What are real estate-backed tokens?

Real estate-backed tokens, or Asset Tokens, are cryptocurrencies that represent the ownership of real-world assets. To put it simply, the value of an Asset Token is based directly on the value of the asset it represents. All of this is made possible by a process called Tokenization.

Tokenization Model

Tokenization splits the ownership of a real estate asset into smaller parts represented by tokens. Each individual holder of the tokens is a co-owner of the asset and receives a share of the profits it generates. Asset Tokens tokens can be bought, sold, or traded just like any other token on the blockchain.

For a more detailed description of Asset Tokens and the process of Tokenization, check out Landshare’s Tokenized Asset Overview video.

Real Estate Tokens vs. Stablecoins

Traditionally, crypto traders move their funds to stablecoins such as USDT, BUSD, and USDC to take profits or protect themselves from market downturns. Because the value of a stablecoin is always at or near $1 USD, they allow traders to keep their funds on-chain while protecting themselves from volatility and price fluctuations. While stablecoins offer great utility in this regard, real estate-backed tokens offer several unique advantages as a safe haven for crypto traders.

1:1 Backing

Tether’s USDT is the most popular stablecoin in the market today. There is a widespread assumption that Tether holds enough USD to back up the whopping 69,000,000,000+ circulating supply of USDT. However, at this point it is not clear how many USDT tokens are backed by actual USD. According to a recent Bloomberg article:

“Exactly how Tether is backed, or if it’s truly backed at all, has always been a mystery. For years a persistent group of critics has argued that, despite the company’s assurances, Tether Holdings doesn’t have enough assets to maintain the 1-to-1 exchange rate, meaning its coin is essentially a fraud.”

On October 15, 2021, the CFTC ordered Tether to pay a $41 million dollar fine for issuing unbacked USDT tokens. According to the release:

“The Tether order finds that since its launch in 2014, Tether has represented that the tether token is a stablecoin with its value pegged to fiat currency and 100% backed by corresponding fiat assets, including U.S. dollars and euros. However, the Tether order finds that from at least June 1, 2016 to February 25, 2019, Tether misrepresented to customers and the market that Tether maintained sufficient U.S. dollar reserves to back every USDT in circulation with the “equivalent amount of corresponding fiat currency” held by Tether and “safely deposited” in Tether’s bank accounts. In fact Tether reserves were not “fully-backed” the majority of the time.”

The concerns over Tether’s operations should be taken seriously if cryptocurrency is to be adopted by the mainstream public. Without being collateralized 1:1 USD, a “run-on-the-bank” situation, or even regulatory actions, could leave hundreds of millions of users with valueless USDT that can no longer be redeemed for $1 USD.

By contrast, Asset Tokens are fixed supply tokens transparently backed by real world assets. Because token holders are shareholders of the asset itself, they have a direct legal claim to their share of the asset’s value.

Cash returns and appreciation

While stablecoins offer protections against market downturns, they do not intrinsically offer any yields or returns to investors, nor can they appreciate in value. In fact, due to inflation rates reaching 30-year highs, holding stablecoins can mean a loss of buying power over time.

Asset Tokens offer similar protections from the volatility of cryptocurrency while also offering annual cash yields and value appreciation averaging between 6–8% and 5–10% respectively, for total annual returns up to 18%. While the value of the US dollar shrinks, US home prices are projected to increase by 13.6% over the next year.

Security

Traders may choose to stake stablecoins on loan or yield farming platforms such as Venus or Beefy Finance. These platforms offer a great way to earn some extra income while holding USD and greatly outperform the rates offered by banks.

Unfortunately, these platforms come with their own risks that can still result in traders losing their investment. Due to the open nature of DeFi, many protocols have vulnerabilities that can be exploited by hackers, and these attacks are not uncommon. $119 million was recently stolen from BadgerDAO by hackers, Cream Finance was exploited for over $100 million, and Poly Network was exploited for $600 million. According to Cipher Trace, over $10 Billion was stolen in DeFi related theft this year.

In addition to DeFi risks, investors are vulnerable to the loss or theft of wallet private keys and exchange hacks, meaning funds can be lost even by holding. If these events occur, there is typically no way to retrieve lost funds.

Tokenized Real Estate offers additional security measures that traditional protocols cannot. While traditional tokens can be lost due to DeFi exploits or wallet hacks, Asset Tokens are immune to this because they are owned by the investor, not a wallet. If an investor’s wallet suffers an attack or is compromised, the stolen tokens can be administratively reissued to a secured wallet.

Conclusion

Tokenized Assets offer a great way to hold your profits in a secure and traditionally stable manner without the risks of being run on, being hacked, or sitting on depreciating assets. While your first thought for a safe haven may be holding stablecoins, it may be time to consider real estate-backed tokens as an alternative.

Landshare offers fractional real estate investment on the blockchain, enabling hassle-free investment for as little as $50. You can find out more about the Landshare platform at https://landshare.io and view our current offering at https://app.landshare.io/property-details.

New to Landshare? Learn more about the platform at docs.landshare.io.

Find us on:

Twitter | Medium | Youtube | Telegram

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